Environmental organizations Klamath Siskiyou Wildlands Center, Umpqua Watersheds, and Cascadia Wildlands Project (collectively KS Wild) brought suit against the Bureau of Land Management (BLM) to invalidate the agency's 2001 and 2003 annual species review decisions (ASR Decisions) regarding the red tree vole (Arborimus longicaudus). KS Wild also sought to enjoin two timber sales, both of which relied on the contested 2001 and 2003 ASR Decisions. KS Wild argued that the ASR Decisions were invalid under both the Federal Land Policy Management Act (FLPMA)[1] and the National Environmental Policy Act (NEPA).[2] The Ninth Circuit reversed the district court's grant of summary judgment to BLM, holding the 2001 and 2003 ASR Decisions invalid under FLPMA and NEPA. The Ninth Circuit subsequently enjoined the Cow Catcher and Cottonsnake timber sales.

The Northwest Forest Plan (NWFP) amended the resource management plans (RMPs) for many BLM districts, including the Roseburg and Medford districts, by creating a variety of administrative land categorizations and establishing Survey and Manage requirements for hundreds of species. In 2001, the Forest Service and BLM issued a Record of Decision for Amendments to the Northwest Forest Plan (2001 ROD), which expanded the NWFP's four-category Survey and Manage classification system to a six-category system and created the ASR process. Under the ASR system, the agency is required to use adaptive management techniques to inform changes or refinements to the Survey and Manage classifications. After issuing its first ASR on the red tree vole on June 14, 2002, BLM downgraded the red tree vole's Survey and Manage classification from Category C to Category D (2001 ASR Decision).[3] The agency removed the red tree vole's Survey and Management designation altogether on December 19, 2003 (2003 ASR Decision). BLM issued environmental assessments (EAs) for the Cow Catcher and Cottonsnake timber sales in June, 2003, and findings of no significant impact (FONSIs) in August, 2003. Consistent with the 2001 ASR Decision downgrading the red tree vole's classification, the agency did not conduct any pre-disturbance vole surveys during the NEPA process.

The Ninth Circuit reviewed the district court's grant of summary judgment de novo,[4] and under the Administrative Procedure Act (APA)[5] may set aside agency decisions that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."[6] The Ninth Circuit first held that neither judicial estoppel nor laches estopped KS Wild from bringing its appeal. Timber company intervener D.R. Johnson argued (BLM did not join this argument) that KS Wild should be estopped on grounds of judicial estoppel and laches from bringing its appeal. Johnson asserted that previous arguments by KS Wild and Umpqua Watersheds in Northwest Ecosystem Alliance v. Rey[7] supporting the 2001 ROD and the ASR process were inconsistent with its current position challenging BLM's ASR Decisions. The Ninth Circuit rejected this argument, reasoning that KS Wild and Umpqua only supported the 2001 ROD and ASR process "insofar as they sought to invalidate the 2004 ROD."[8] The court distinguished KS Wild's past arguments, which asserted that the 2001 ROD was an effective forest management strategy, from the position that "all agency actions ostensibly taken pursuant to the ASR are lawful."[9] The court held that the organizations did not take a "clearly inconsistent position" so judicial estoppel did not apply. The court also rejected Johnson's laches claim, holding the company failed to establish both (1) "lack of diligence by the party against whom the defense is asserted and (2) prejudice to the party asserting the defense."[10] The court held that KS Wild did not show lack of diligence by "abandoning" an earlier claim challenging the 2001 ROD, when that case was dismissed without prejudice before KS Wild filed the current claim fifteen days later.[11] Nor did Johnson's economic losses amount to prejudice, for not only was that type of harm not pertinent to the laches analysis,[12] but laches is generally disfavored in environmental cases because the public at large would be harmed by environmental damage.[13]

The Ninth Circuit next turned to KS Wild's FLPMA claims. Under FLPMA and the governing regulations, BLM must formally amend RMPs when a proposed action will change either "the scope of resource uses" or the "terms, conditions, and decisions" of the plan.[14] The agency may make certain minor "maintenance" type changes to the plan without triggering formal amendment.[15] In this appeal, BLM argued its 2001 and 2003 ASR Decisions merely "maintain[ed]" the 2001 ROD so formal procedures were unnecessary. The Ninth Circuit disagreed, holding the ASR Decisions amended the RMP and that as a consequence the agency's failure to adhere to formal procedures violated FLPMA. The ASR Decisions relied on mostly (eighty percent) new data--too high a volume, the court reasoned, to slip within the narrow scope of the "maintenance" provision. While the 2001 ROD may have anticipated some changes to the Survey and Manage classifications, the ASR Decisions fundamentally altered the terms and conditions of the RMPs. The court cautioned that too broad a "maintenance" allowance would nullify FLMPA's requirement that the agency act in accordance with established RMPs.[16] However, the court explicitly rejected KS Wild's argument that the ASR Decisions qualified as "amendments" because they worked a "change in resource uses"[17] by potentially increasing timber harvests. The ASR Decisions may have changed the probable sale quantity (PSQ), but the "scope of the resource uses" remained within the RMP's rough estimates.[18]

The Ninth Circuit rejected BLM's argument that the ASR process satisfied FLPMA's requirements for formal amendments because the process was supported by the Final Supplemental Environmental Impact Statement (2000 FSEIS) prepared for the 2001 ROD. Even if the 2000 FSEIS did contemplate some modifications under the adaptive management scheme, the court indicated that at some point modifications are so dramatic that they cannot be justified as "maintenance." Moreover, the court noted that the 2000 FSEIS weighed and "resoundingly rejected" an alternative that would have put the voles in a less protective category to begin with. The 2000 FSEIS concluded that placing the vole in that lesser category would "increase the risk" of isolation and inadequate connectivity by fragmenting habitat.[19] The court also noted that statement in the 2000 FSEIS indicating that five years would be an insufficient amount of time to "make an informed recommendation to the species['] future disposition" belied BLM's claim that the document supported the ASR Decisions that lowered the vole's Survey and Management status. The court held that BLM's ASR Decisions violate FLPMA because they heralded a "dramatic change in policy" regarding the red tree vole's Survey and Manage designation, and amounted to a change in a "term or condition" in the RMP that required the agency to a formal amendment process.

The Ninth Circuit then addressed KS Wild's claims that BLM should have subjected its 2001 and 2003 ASR Decisions to NEPA analysis. Agencies must prepare a supplemental EIS where 1) the agency makes substantial changes in the proposed action that are relevant to environmental concerns, or 2) there are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts. [20] The court held BLM's ASR Decisions met both prongs of this threshold, obliging a supplemental EIS.

The court held that the ASR Decisions made "substantial changes" in the RMPs. While the court agreed with BLM that changes in agency policy do not always require NEPA analysis,[21] it faulted the agency's failure to prepare a supplemental EIS for the same reasons it cited in holding the agency violated FLPMA. That is, the court again characterized BLM's ASR Decisions as RMP amendments rather than mere "maintenance" changes and noted the 2000 FSEISs' explicit rejection of assigning the vole a less protective status. The court rejected BLM's argument that the Supreme Court's decision in Southern Utah Wilderness Alliance (SUWA) v. Norton[22] compelled the court to treat the 2001 ROD and the Medford and Roseburg RMPs, rather than the ASR Decisions, as the final "agency action." The ASR Decisions would be insulated from NEPA review under that analysis, since NEPA only applies to "major Federal actions."[23] The court held, as did the Supreme Court in SUWA,[24] that amendments to RMPs require supplemental NEPA analysis. Having already determined that the ASR Decisions are amendments requiring formal procedures, the court held that the ASR Decisions necessarily also trigger the NEPA requirement of a supplemental EIS.[25]

The court also held that the ASR Decisions were the product of "significant new circumstances or information." Again, because the changes to the vole's Survey and Manage designation "dramatically" altered BLM's obligations and were based on data not available when the 2000 FSEIS was created, the court held the ASR Decisions were "significant." Following its reasoning in Idaho Sporting Congress v. Thomas,[26] the court explained that an agency must prepare an EIS where a plaintiff raises substantial questions as to whether a project may have a significant effect.[27] The plaintiff need not show that significant effects will in fact occur. The court held that because the 2001 ASR Decision raised substantial questions as to its impact because it adopted a policy that closely resembled the alternative rejected only months before in the 2000 FSEIS. The court also found relevant BLM's failure to produce even an EA, a document "fundamental to the decision-making process."[28] The Ninth Circuit held BLM's 2001 and 2003 ASR Decisions regarding the red tree vole invalid for failing to satisfy NEPA.

The Ninth Circuit quickly disposed of the timber sale claims, holding that because the ASR Decisions violated FLPMA and NEPA, the sales were invalid for failure to "conform to the approved RMP" as required by FLPMA regulations.[29] The court enjoined both the Cow Catcher and the Cottonsnake sales. The court reinstated the Survey and Manage designations under the 2001 ROD,[30] and since neither sale conducted pre-disturbance surveys for red tree voles as required for Category C species, they did not comply with the 2001 ROD.

In sum, the Ninth Circuit held the 2001 and 2003 ASR Decisions invalid for failure to comply with FLPMA and NEPA. The court held unlawful and enjoined the Cowcatcher and Cottonsnake timber sales, which complied with the (consequently invalid) ASR Decisions rather than the (reinstated) 2001 ROD.